A perfect mistake

As the industry reeled from the 2008 property slump, job opportunities for newly qualified architects were as rare as hen’s teeth in 2009.

Ironically, it was this distressed market that was to be the catalyst for Jacques Van Embden’s career as a residential property developer.

Today, aged 31, this savvy young entrepreneur is not only the group managing director of Prime Residential Group, he is also the brains behind Blok, the group’s luxury property development division.

Slim pickings in the job market necessitated a change in mindset. Van Embden purchased his first property in 2009 with two friends with a view to fixing it up and renting it out.

A year later Van Embden, armed with a R60m facility, and his investors had acquired 10 properties, including apartment blocks. It was the launching pad for Prime Residential Group, the letting arm focused on acquiring and letting property in the R5 000-R7 000/month price range. 

“The core investment criterium was urban stock, centrally located to schools and places of work opportunity,” he says. “These are far more defendable, safer assets than non-core assets like holiday destinations. We were lucky with our timing. Interest rates remained low and it also coincided with the change to the personal home loan structure in SA that made it much harder to buy properties.

So the market as a whole, especially the middle market, started to trend towards renting rather than buying. It was a perfect mistake. It all just fell into place, but it is getting more intentional in terms of our growth and targets,” Van Emden tells finweek.

Today, with a footprint in Cape Town and Greater Johannesburg, Prime Residential has a pool of 1 600 homes and apartments worth R1.2bn.

Brand Blok   

Having built a fairly substantial empire around letting, he embarked on an even more challenging project last year.

“We were often converting buildings for the middle sector and believed we could take the expertise we had in architecture and construction and bring it to the top end of the market place on the Atlantic Seaboard.”

It was the birth of Blok, luxury residential developments, that pioneered the culture of apartment city living and focused on what Van Embden terms inside-out design for owner-occupiers. Within six months four new apartment blocks had been launched, all, with one exception, on the Atlantic Seaboard.

To date, 54 of the 56 units have sold, generating revenue of just over R300m, while a further three developments – estimated to generate around R350m in gross sales – have been secured. 

It appears that Van Embden has found a niche in the market.

“There are not enough developers constructing buildings for owner-occupiers. Developers are heavily investor-focused and our real value proposition is almost to develop the buildings purpose-built for our clients,” says Van Embden. 

In other urbanising cities around the world residential developers have created a legacy of developer-owner collaboration and that’s the opportunity they want to tap into, he says.

The development of the Blok app for their off-plan development brand is one of their key features of that collaboration.

This is an excerpt from an article that originally appeared in the 7 May 2015 edition of finweek. Buy and download the magazine here.